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In geek we trust: Astros confident in their plan

Houston utilizing modern analytics and more to rebuild its team virtually from scratch

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Justice on Astros' optimism 2:16

MLB.com executive correspondent Richard Justice talks about the Astros' efforts to build a winning club from the ground up

By Richard Justice

KISSIMMEE, Fla. -- First, there's the Google rule. To understand the men and women in charge of rebuilding the Houston Astros, indeed to understand the unique path the franchise has headed down, this is a good place to begin.

"We encourage our people to spend 10 percent of their time pursuing whatever project they want as long as it's baseball-related," Astros general manager Jeff Luhnow said.

Got that? One of Luhnow's first hires -- a guy with multiple advanced degrees in engineering, a guy who does not have a typical baseball background -- stole the idea from, you guessed it, Google.

Luhnow has a lot of very smart people on his staff. Actually, they are people a lot like himself. They are creative and ambitious, and he believes they must constantly be challenged. But they must also be encouraged to think outside the box.

"Think about any harebrained idea you have, any research you'd like to do," Luhnow said. "It's free time to learn about the game and try and come up with new ideas."

If that doesn't sound like anything you've ever heard the general manager of a Major League Baseball team say, you're probably on to something. Luhnow was 37 years old when he left the world of MBAs and Southern California startups and venture capitalists to work for the St. Louis Cardinals in 2003.

Luhnow had never worked a single day in baseball. Nor had he played above the high-school level. And let's just say that not every member of the Cardinals' front office welcomed Luhnow with open arms.

Now he's the guy who has been charged with turning around a franchise that has been the worst in baseball for the past two seasons, a team that lost 106 games in 2011 and 107 in '12.

Luhnow has methodically stripped the Astros of their best Major League players and traded them for an assortment of mostly young guys. When he was hired, his new boss, owner Jim Crane, told him to rebuild the Astros and to do it the right way.

Crane told Luhnow he would give him the resources and the freedom to do things right, and that if things got ugly at the beginning -- you know, as in going 55-107 last season -- he would stand by him.

Plenty of baseball people -- that is, the traditional baseball people -- are skeptical that a bunch of kids with engineering degrees, kids who spend their spare time writing algorithms, know a thing about constructing a baseball team.

Luhnow believes otherwise. He believes the A's and Rays and a bunch of other teams have proven that there's a whole new way of evaluating players and constructing rosters and game plans and all the rest.

"Here's a guy who had careers that had nothing to do with baseball, had been in baseball for one year and all of a sudden he's in charge of the amateur Draft. I understand why people would resist that. The Cardinals had a lot of experienced scouts that had been there for 25 years plus. It's natural to push back a little bit when something like that happens. I knew that."

-- Astros GM
Jeff Luhnow

If he felt the need to defend himself -- and he doesn't, unless pressed or frustrated -- he points to St. Louis' player-development system. It has been one of the most productive in baseball and remains so today. Many of the current Cards -- Allen Craig and Daniel Descalso and Jaime Garcia and Oscar Taveras and others -- were his guys.

Still, Luhnow understands why people are skeptical. Traditional baseball people do not write algorithms in their spare time. He understands why there was plenty of blowback when Cardinals owner Bill DeWitt Jr. installed him as a top executive in his front office.

"Here's a guy who had careers that had nothing to do with baseball, had been in baseball for one year and all of a sudden he's in charge of the amateur Draft," Luhnow said. "I understand why people would resist that. The Cards had
a lot of experienced scouts that had been there for 25 years plus. It's natural to push back a little bit when something like that happens. I knew that.

"Very few people come into baseball after having done other careers. And at a high level. I came in as a vice president. That's almost unheard of. There were people watching everything I did. I never felt welcomed by some. I'd go down there [to the clubhouse] and they'd smile and so forth. But the conversations would stop when I walked in a room. I didn't have a ton of stuff to do down there, anyway, and I wasn't going to hang out down there."

DeWitt learned of Luhnow through his son-in-law, Jay Kern, from their time together at a Chicago management-consulting firm. DeWitt had become convinced there was a place in baseball for some of the same principals that Fortune 500 companies had used.

"I give a lot of credit to Bill for being visionary and understanding what the future was going to hold for the Cardinals and what they needed to do to compete and be successful for the next 10 years," Luhnow said.

In eight years, Luhnow installed a system of analyzing information that he used to put together a great farm system, allowing the Cards to keep their payroll under control while remaining competitive.

The Cardinals went to the World Series three times during Luhnow's years in St. Louis. "It's nice to feel you had at least a small part to do it," he said.

When Crane, a Houston businessman and a smart, creative, self-made millionaire, bought his hometown baseball team in 2011, he went looking for someone to run his baseball operation. Like DeWitt, he believed a basic business blueprint, one that had traditional baseball fundamentals of scouting and instruction but also utilized analytics, was the most efficient way to operate a team.

He also believed the Astros needed a massive makeover. In the six seasons after winning the 2005 National League pennant, they'd spiraled downward, thanks to a series of poor First-Year Player Drafts. With a weak farm system, management attempted to compensate by acquiring a series of older players, such as Miguel Tejada, Pedro Feliz and Pudge Rodriguez.

The Astros were putting the finishing touches on a 106-loss season -- their worst ever at the time -- when Crane closed the deal on the purchase. It was those terrific St. Louis drafts that attracted him to Luhnow, who probably sealed the deal with a 21-page, point-by-point report on how a baseball operation should be constructed.

Luhnow quizzed Crane on how committed he was to a true rebuilding program. How would he react when the losses stacked up? Would he allow the new general manager to execute his vision? The more they talked, the more Luhnow became convinced he and Crane believed in the same fundamentals.

Back to the Google rule. That was the idea of Luhnow's first hire with the Astros, Sig Mejdal, who has two engineering degrees and another in cognitive psychology. He worked at Lockheed Martin and NASA before Luhnow lured him to the Cardinals. In case you're wondering, he's the guy who writes algorithms for fun.

Luhnow believed that Mejdal's gifts for compiling and understanding information were a natural fit for baseball. He effusively praises Mejdal for his ability to develop programs that helped the Cards sort through thousands of pieces of information -- scouting reports, medical data, statistics, etc. -- to assist in evaluating players.

"There's analytic work you can do to help focus your resources. Should we be investing in Australia? Taiwan? Brazil? What has history shown about how these markets develop? A lot of what we did wasn't to put numbers into a computer and see what we learned. There are 30 clubs in baseball. That means there are 30 different ways of doing everything."

-- Astros GM
Jeff Luhnow

There's also a larger philosophy at play with the Google rule. It's a way to empower employees, and it doesn't stop with the front-office executives.

"One of the best ways of innovating -- and again, this is another management-consultant strategy -- is you talk to people inside your own organization," Luhnow said. "You get ideas to bubble up from the bottom. People that are on the front line, whether it's an automobile manufacturer line worker or the accounting guy that does the numbers, you actually communicate with them and you draw stuff out of them.

"For every five ideas you get, maybe only one is worth pursuing. But for every five that are worth pursuing, there's one worth doing that adds value. If you sit in this office and
try to figure everything out, you might come up with some good ideas, but the good ideas are out there. It's the hitting coach in Single-A. Oftentimes he'll tell you, 'Why are we practicing this instead of this? Why can't we have equipment to help us do this better?' Those are the types of things that can really help you. When you talk about an analytical-based approach, it's really a logic-based approach. And it applies to every element of the game."

Luhnow is again under the microscope. His trades have left the Astros with a Major League roster that many believe could be one of the worst in history in this, their first year in the American League. And there's the "Moneyball" aspect of it. Ten years after Michael Lewis' brilliant book about Billy Beane and the Oakland A's was published, there are still those in the game -- and those who cover it -- who absolutely hate the idea that analytics rather than traditional scouting, done by men with radar guns and stopwatches, can be an essential part of evaluating talent. Virtually every team has an analytics department, but general managers rely on them to varying degrees.

With the Astros, Luhnow has hired scouts and instructors at every level, but he has also put together a front office chock full of people with advanced degrees in economics and law and business.

Luhnow realized what he'd gotten himself into when a Baseball America columnist torched him during his first week on the job with the Cardinals. The writer said that hiring a guy with a bachelor of science degree from Penn and an MBA from Northwestern was no way to run a baseball team. At last check, he has not given Luhnow credit for all those good Draft picks with St. Louis.

For example, one of the Cardinals' best prospects is Taveras, a 20-year-old outfielder. Scouts roll their eyes at the idea that analytics could help in the evaluation of a young kid, especially when no data bank of statistics is available.

"You don't," Luhnow said. "My approach was that analytics has very little to do with it except for the fact you can study the market, understand what types of players have been successful. Are there common characteristics among those players that have been successful? Have they been signed at 16, 17, 18? Do they tend to be corner outfielders from the Dominican, shortstops from Venezuela?

"There's analytic work you can do to help focus your resources. Should we be investing in Australia? Taiwan? Brazil? What has history shown about how these markets develop? A lot of what we did wasn't to put numbers into a computer and see what we learned. There are 30 clubs in baseball. That means there are 30 different ways of doing everything.

"Let's take Venezuela as an example. Let's look at all 30 clubs' approach to Venezuela. Which clubs have been the most successful? What's their approach? Do they have four area scouts, five area scouts? How do they carve up the regions? Do they have a cross-checker? Do they send their American scouts down there? Do they have a dedicated guy down there? Do they send their Venezuelan players to the Dominican? Do they send them directly to the States?

"There's so much you can learn. This is management consulting 101. How are you doing relative to your competition? Are there any best practices from your industry, or outside your industry, that you can quickly apply to get better? That's really what it is."

Now about the future. Will the Astros really be one of the worst teams of all-time in 2013? Luhnow scoffs at the notion. When the club lost 107 times in 2012, he believed the untold story was that the organization was taking a huge step in the right direction. While the club was losing, Luhnow was putting his front office in place -- he replaced virtually everyone -- and he was dealing away the veterans who weren't going to be around when the club becomes competitive.

"It was very tough," Luhnow said. "I'm competitive. Jim is competitive. Nobody likes to lose any games, much less 107 games. But I judge last year more on what we were able to do to lay the foundation for the future. In that regard, I think we won. I think we not only won, we managed to accomplish in one year what could have taken three or four years to accomplish. By making the trades we made, we acquired 21 players that are anywhere from A ball to the big leagues.

"That's the equivalent of two Drafts. Now, granted, there's probably no [early first-rounders] in there, but that's a lot of players that have already cleared a few hurdles. They're succeeding. We look for particular things in those types of players. That infusion of talent had an immediate impact in our system. The Draft was excellent. I believe now we have the people leading each functional area that are going to be here for a long time. We're now poised to build."

Now about 2013. Yes, Luhnow believes the Astros will be better than people think. He believes that all that youth and the energy of new manager Bo Porter will make them fun to watch and more competitive than they were the past two seasons. Luhnow also believes that wins and losses might not be the best way to evaluate the season.

"We have to demonstrate, not only to ourselves but to our fans, that we're making meaningful progress toward our goal," Luhnow said. "I'm not going to tell you what that means in terms of wins and losses. But I think we'll be able to know. When we sit here at the end of this season, we'll be able to know whether or not we're meaningfully closer to our goal of being able to compete.

"Is Jonathan Villar the shortstop of the future? Is Jonathan Singleton going to be the run-producer we think he's going to be? Is Jarred Cosart going to be in this rotation for many years to come? Can Brett Wallace contribute as an everyday player in the middle of the lineup? Is Jason Castro the guy? Can Bud Norris be a No. 1? He's a No. 1 on our club. Can he be a No. 1 on any club? I think we might find that out this year. Can Jordan Lyles be a No. 2 at the big league level? I think he can be. Those are questions we need to answer. Also, the whole culture that [Porter] is setting up downstairs. I think we're already seeing signs of it working. Players are working, buying in. We're getting better. We're going to have more success than people think. There's also a concept called a virtuous cycle, where when things start going well, it accelerates the other things going well.

"When these Astros, whether it's 2013 or 2014, when it starts to ignite, this is something that could get good very quickly. I go to bed at night dreaming of being able to pick up the phone and tell Jim we want to be buyers this year at the Trading Deadline because we're exceeding expectations and need a few pieces to become even better. I look forward to that day."

Luhnow has absolutely no doubt that day is coming, and a lot sooner than people think.

Richard Justice is a columnist for MLB.com. Read his blog, Justice4U. This story was not subject to the approval of Major League Baseball or its clubs.